Minnesota Employment Growth Remains Firm
Minnesota’s labor market remains one of the healthiest in the nation. The
state added 62,500 jobs over the past year, with improvement in every
major employment sector. Notable gains were seen in healthcare,
professional & business services and wholesale & retail trade, which added
13,400, 12,400 and 12,400 jobs, respectively. The information sector
posted the largest percentage point gain, but the rise comes off of a
relatively small base, producing a total of 2,200 jobs in the past year.

Minnesota’s unemployment rate held firm at 5.5 percent in February and is
currently 2.2 percentage points below the national rate. The state also
enjoys a significantly higher labor participation rate than the nation, which
stood at 70.9 percent in February. Still, like the nation, the participation
rate continues to slip and is now at levels not seen since the early 1980s.

The Bureau of Labor Statistics recently released its annual revisions to
nonfarm employment data, which revealed that Minnesota added 18,000
more jobs than previously reported between March 2011 and December
2012. One caveat to note from this report is that the accelerated job growth
contributing to this gain took place in 2011 and early 2012, while estimates
for job growth were more muted in the latter half of last year. This potential
slowdown appears to have reversed at the start of 2013. Year-over-year
growth in February jumped to 2.4 percent, the largest gain since September
2011. Hiring may have lost some momentum at the end of 2012 due to
worries over the fiscal cliff, but the slowdown appears to have been
temporary, and job growth now appears to be on a stronger trajectory.

The Twin Cities Hold the Key to Minnesota’s Gains
The Minneapolis-St. Paul metro area has seen steady employment growth
over the past year, with nonfarm employment up 2.4 percent. The
Minneapolis-St. Paul metro area comprises 11 counties in Minnesota as
well as two border counties in Wisconsin and accounts for nearly
65 percent of Minnesota’s employment base. In line with the state,
Minneapolis’s job gains have been fairly broad based, with strong gains in
business and professional services, healthcare and retail trade. Not only has
the Minneapolis area added jobs at a faster rate than the nation but the
quality of jobs being created is also much better. A larger proportion of
Minneapolis’s job gains have come from higher-paying jobs in the service
sector, such as professional, scientific and technical services, while
relatively fewer jobs have been created in lower-paying sectors such as
leisure and hospitality and retail trade.

Annual revisions to the Minneapolis’s metro area employment show that
employment gains were underestimated by 23,300 for the March 2011 to
December 2012 time period, which means Minneapolis accounted for more
than 100 percent of the upward revision to the state’s data. This means that
earlier estimates for job growth in the rest of the state had been overstated.